Haims column: Avoid heartache and anxiety with estate planning
Once again, I am watching a client’s family being torn apart by sibling rivalry anxiety, and a deep sense of hopelessness. It’s hard to watch this happen time and time again. No, a loved one has not passed away — yet. And this is the problem.
When this family’s father passed away a few years ago, their mourning and sadness was somewhat isolated to just the emotional loss of their dad. His will clearly defined his final wishes and his financial affairs were, for the most part, in order. A couple years after their father’s passing, the adult children thought it best that their mother come live with the son here in Colorado. The son set up a checking and savings account at a local Colorado bank, had social security payments, investment accounts, and real estate interests redirected to the new account. All was good — so he thought.
Recently, the mother experienced a stroke while exercising and was hospitalized. She’s doing better now. However, while she was hospitalized, the family had been informed that they could not access many of their mother’s financial accounts nor her health care directives. It seems that when the mother moved here from another state, she was in good health and of sound mind. Her husband had efficiently managed the development of a trust and their medical and financial matters. Therefore, nobody had thought about the need to modify or add their names to financial accounts, medical powers of attorney documents, and HIPAA consent forms.
Fortunately, because the family’s mother lived, there is an opportunity to develop proper documents. Unfortunately, the finger pointing, criticism, bickering and guilt has likely caused irreversible harm amongst the family.
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Be proactive — reactive can be costly and sad
Rich or poor, or somewhere in between, we all have ideas of what we’d like to see our future look like. More than likely, most people may not want to envision a time spent in court, arguing with sibling and other family members, or fighting with financial institutions and health providers to uphold end-of-life wishes and the management of personal assets.
Unfortunately, for people who have not taken the time to get educated about planning for end-of-life legal, financial and medical matters, heartache, turmoil, along with family and sibling quarrelling may be inevitable.
Estate planning does not only apply to wealthy individuals. If you or your aging loved one’s own property or other assets like stocks and bonds, it is important that you educate yourself about the importance of documents such as a will, advance directives, powers of attorney (both financial and health matters) and various types of trusts. Avoid the potential of formidable challenges by taking the time to understand how these documents may affect you and your aging loved ones.
Regrettably, outside of law school, there are few educational courses that teach people how to prepare for medical or financial emergencies in addition to the intricacies of the distribution of an estate. According to an article by Forbes, nearly 50% of Americans aged 55 and over have not created a will. Further, less than 20% of the people in this cohort have health care directives and the proper types of power of attorney.
When it comes managing your, or your loved one’s, health care and financial wishes upon death, laws are quite specific about who can participate in health care and financial related conversations and decisions.
The following are some of the documents one may need to have when developing an estate plan:
• general, limited, and durable power(s) of attorney.
• springing power of attorney
• disability trusts (children of passing parents)
• irrevocable/ revocable living trusts
• living will
• advance care directive
• HIPAA consent form
Proper and timely estate planning can really help during a time of family crisis. Preplanning will greatly assist family members and loved ones to know what medical and financial efforts you or your ill family member(s) would want. Further, having the proper documents in order will provide you and your family members the legal means to carry out those wishes.
At the end of the day, legal documents will not solve all problems. The best approach to developing a well-conceived “plan” will start with a conversation that occurs well before an unexpected issue arises. Speak with your partner, family and sibling(s) about what your wishes are.
Without proper legal documents, at best, assets may go to probate, and tax implications may eat away at your wealth/inheritance. At worst, family and loved ones may see the worst in each other.
If you are living a state other than where your legal documents were created (particularly medical power of attorney), you should check to make sure they conform to the state in which you are now residing. While most state laws often recognize powers of attorney that were validly created in another state, there are situations where problems may arise.
Judson Haims is the owner of Visiting Angels Home Care in Glenwood Springs, Basalt, Aspen and the surrounding areas. He is an advocate for our elderly and is available to answer questions. His contact information is, http://www.visitingangels.com/comtns, 970-328-5526.
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